Jhe National Football League hired Gil Moran in 2018 to reinvent NFL Game Pass, a streaming service featuring out-of-market games and other NFL content that debuted in North America in 2015. Moran’s brainchild , NFL+, unveiled Monday, will provide fans with football, football and more football on any number of devices. Streaming content is nothing new. What’s different is that the league is taking over with a mission to plug a $400 million hole — the fee paid by Verizon to broadcast the NFL in the league’s latest contract — and do it on the smart TVs, phones and tablets.
“If you’re on the go,” Moran said Forbes“You have a busy lifestyle – there’s something for every football fan.”
Renaming Game Pass to NFL+ is just the first step. As media distribution evolves, NFL+ can align with NFL Commissioner Roger Goodell’s goal of $25 billion in annual revenue by 2027.
“They know the strength of their content,” said a longtime sports executive Chris Lencheski. “But knowing the strength of your content is one thing; having the ability to execute against that is another.
Convert NFL Mobile to NFL+
The NFL has a history of taking its time and learning its lessons before launching a new media venture. Game Pass, for example, was widely sold overseas before coming to the home of the NFL.
At $4.99 per month, NFL+ offers live streaming of NFL games live in local markets for mobile and tablet devices only. A premium subscription costs $9.99 per month and offers ad-free replays for all connected devices, including laptops, game consoles and media players like Apple TV and Google’s Chromecast. moran said Forbes the league wanted to “jumpstart” its direct-to-consumer ecosystem and further prepare for “the next evolution of business” as consumers use connected devices for streaming services while ditching cable companies. “There’s a way to do direct-to-consumer differently,” Moran said. “I think it’s up to us to challenge ourselves and push our own limits.”
In 2005, the NFL shocked network executives when it hit a $600 million contract with Sprint which included a $200 million fee for mobile streaming rights. The agreement gave customers access to NFL mobile games outside of cable. Sprint was granted permission to broadcast NFL video clips and access the league’s cable channel, NFL Network.
“It’s been building for years,” says Lee Berke, sports media rights adviser. “All of these (media) companies have money but they don’t have experience in sports, and the NFL has groomed them to produce, distribute and sell NFL content.”
In 2010, Verizon saw the promotional benefit of adding the NFL, and 4G enabled networks to provide a better streaming experience. The company acquired the rights from Sprint for a grossed $720 million, which raised the league’s mobile rights fee to $250 million per year. “It was a reflection of a market that had grown,” said former CBS Sports president Neal Pilson. Since then, mobile rights included live NFL games on Sunday afternoons, prime-time and post-season games. Verizon has also added streaming for NFL games to its Yahoo property. This increased the NFL’s rights fee to $400 million.
Last year, Verizon sold its media business for $5 billion and did not retain mobile rights to the NFL. Moran said he presented a plan to Goodell and club owners in 2021. He took mobile rights off the market and integrated with Game Pass to create NFL+. “We thought distribution on (an owned and operated platform) was the best thing for the consumer,” Moran said.
With NFL+, live out-of-market preseason games can be viewed on all devices, including Apple TV and Chromecast, with a Game Pass account. It’s here that the league can further test the technology around the future of its Sunday Ticket package, which is currently on the market for more than $2 billion. NFL+ will not include access to the NFL Network or the popular NFL RedZone channel. But plans to add the content are likely to emerge, particularly if the NFL finds an investment partner for its media business.
NFL+ will run on Google’s OTT system.
In the meantime, NFL+ allows the league to continue monitoring the streaming landscape. While the league doesn’t want to move too fast and disrupt its revenue from linear TV networks, which have renewed for more than $100 billion, the move means it can better prepare tech companies for the future of distribution via connected devices.
More importantly, the NFL knows that traditional fans still prefer to watch NFL games on linear television, especially the Super Bowl, the highest rated show in America.
Respect the basics of WWE
The league said Forbes that current Game Pass subscribers would be grandfathered into NFL+ if they had automatic renewal. The price drops to $19.99.
The NFL didn’t reveal Game Pass subscriber numbers or discuss valuation, but Verizon left the NFL’s mobile rights on the table for more than $400 million. Moran said the NFL “only exposes itself to subscription revenue” and does not have a sponsor at this time.
Moran said the NFL has learned from the experience of World Wrestling Entertainment’s streaming product, WWE Network. The publicly traded sports media company went direct-to-consumer in 2014. Although the service folded, WWE integrated the operation into a $1 billion in revenue when he secured the rights to NBCUniversal’s Peacock streaming platform. “Hats off to WWE,” he said. “I think they did a terrific job of getting out the door.”
When asked if NFL mobile streaming rights could come back into the market after he completes his experiments, Moran replied, “Absolutely. But for this season, and our plans to develop the direct-to-consumer product, rights are now rolling out in NFL+.
Lencheski, president of private equity advisory firm Phenicia, estimated that NFL+ could eventually attract more than a million paid subscribers, especially once it goes international. For help, Lencheski says, NFL partners like Verizon would help the league establish a base through an “activation inventory.” The NFL would likely issue NFL+ codes for corporate partners to use in promotions. This would allow NFL+ to collect data on new customers with a view to expanding its permanent base of subscribers, Lencheski said.
Unlike cable, streaming subscribers aren’t locked into a lengthy contract. The NFL will be challenged to keep fans going beyond the Super Bowl. “There comes a time when a customer says, ‘OK, I’ve had enough,'” Lencheski said.
During the offseason, Moran said NFL+ can bring fans historical games and possibly add content during the summer. “These types of investments are what we’re looking to do in the future,” Moran said. “It’s happening.”